Source : INDIA TODAY NEWS
“I am going back without taking the car.”
For Technical Gyan, a car-focused YouTuber with more than 600,000 subscribers, those were not words he expected to say on the day he went to collect his new vehicle. It was supposed to be an exciting day for his family — the delivery of a car he had wanted for a long time, after completing the financing formalities and arranging everything needed to drive it home.
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Instead, the day was consumed by a dispute over insurance.
Technical Gyan says the showroom had quoted around Rs 31,000 for insurance, while he had already bought a policy online for around Rs 12,500. The policy he purchased included the add-ons he wanted, including engine protection, flood loss and key loss. He had already paid for it before arriving at the showroom and had told the dealer that he would not be taking its insurance.
But according to his account, the showroom insisted that he take its insurance before handing over the vehicle.
Hours passed as the two sides tried to resolve the issue. His wife was unwell and his two children, who were with the family, became hungry, thirsty and increasingly irritated. What should have been a memorable family occasion turned into a day of waiting, arguments and uncertainty.
“I am going back without taking the car,” he said after leaving the showroom without the vehicle.
The matter was eventually resolved through a compromise. He says the showroom brought its insurance cost down to around Rs 22,000-23,000 and he agreed to pay the difference, with an arrangement over the refund of the policy he had already purchased. The car was finally delivered later that night.
But the experience raises a question that many new car and bike buyers may not think about until they are standing at the showroom: you need valid insurance for your vehicle, but do you have to buy that insurance from the showroom?
And accounts from other buyers suggest that the problem may not be limited to one customer’s experience.
WHEN THE SHOWROOM WANTS TO CHOOSE YOUR INSURER
A buyer on X described a similar problem while trying to purchase a vehicle. He said he wanted to compare insurance, accessories and other charges himself rather than simply accept the showroom’s package. According to his account, the salesperson continued insisting that he take these from the showroom.
For the buyer, the issue was not whether he wanted insurance. It was whether he should be allowed to decide where he bought it.
Another buyer, posting on Reddit about a Hyundai Venue in Visakhapatnam, described a more direct confrontation. The buyer said the showroom quoted Rs 53,000 for insurance, while an outside quote with the same add-ons came to Rs 25,000.
“Showroom Quote: Rs 53,000. Outside Quote (Same Add-ons): Rs 25,000,” the buyer wrote.
He said that when he told the showroom he would arrange insurance himself, the salesperson and manager told him that delivery would not happen unless he took the showroom’s policy. He also said he was warned about possible problems with cashless claims if he bought insurance elsewhere.
These are individual consumer accounts and do not by themselves establish how widespread such practices are. But similar accounts appearing across social media raise a straightforward consumer question: if a buyer has arranged valid insurance from another insurer, can a showroom make its own policy a condition for handing over the vehicle?
According to insurance and legal experts, the answer is no.
YOU NEED INSURANCE, BUT YOU CAN CHOOSE WHERE TO BUY IT
Shilpa Arora, Co-founder and Chief Operating Officer at Insurance Samadhan, says a dealer cannot force a buyer to purchase insurance through the dealership as a condition for vehicle delivery.
“No, forcing a buyer to purchase insurance through the dealership as a condition for vehicle delivery is illegal and violates Insurance Regulatory and Development Authority of India (IRDAI) guidelines,” Arora says.
She adds that while having valid insurance is mandatory to legally register and drive a vehicle on the road, the customer has the right to choose the insurer.
That distinction matters because a buyer standing at a showroom may hear the words “insurance is mandatory” and assume that the policy being offered by the dealer is also mandatory.
It isn’t the same thing.
According to Arora, only third-party liability cover is mandatory for new vehicles. This covers damages, injuries or death caused to a third party. Own-damage cover, which protects the buyer’s own vehicle, and additional add-ons are optional.
A buyer who finds a cheaper policy elsewhere with similar or better coverage can choose that policy, she says.
“Dealerships cannot lawfully force you to buy their in-house policy, nor can they make it a mandatory condition for taking delivery of your vehicle,” Arora says.
For someone buying a new car, that is an important distinction: the vehicle must be insured, but the buyer can choose the insurer.
BUT WHAT IF THE DEALER ACTUALLY REFUSES DELIVERY?
This is where the issue moves from sales pressure to a much more serious consumer problem.
Technical Gyan says that is what happened in his case. He had already paid for the outside policy, yet he says he was unable to take the car home because the showroom wanted him to buy its insurance.
The Reddit buyer described a similar situation, saying he was told that the vehicle would not be delivered unless he took the showroom’s policy.
Dheeraj Gupta, Advocate and Managing Partner at Peritia Law Chambers, says a dealer cannot make its insurance a condition for completing the sale of a car or bike.
“Firstly, any automobile seller cannot force a consumer to take insurance from them specifically,” Gupta says. “The law states that vehicle should be insured when it comes out of the showroom. It simply means that the vehicle should be insured when leaving the consumer to choose his own insurance provider.”
If a dealer refuses to deliver the vehicle on this ground after the buyer has already made a payment, Gupta says the consumer can approach the consumer courts.
He says refusal to sell or deliver the vehicle because the buyer did not take insurance from the dealer amounts to an unfair trade practice. He adds that such conduct can also raise issues under competition law and the Consumer Protection Act.
For a buyer, however, the immediate question is not just whether the dealer is right or wrong. It is: what should I do if this happens to me?
IF THIS HAPPENS TO YOU, DON’T JUST WALK AWAY
The first instinct may be to argue with the salesperson, cancel the outside insurance or agree to the showroom’s policy just to get the keys.
Experts say the first priority should instead be to create a record of what is happening.
Arora advises buyers to immediately ask the dealer to put the refusal in writing and then send a formal follow-up email documenting the conversation.
“Dealers rarely provide written proof of this practice, so securing documentation is crucial,” she says.
That means if a salesperson tells you, “We will not deliver the car unless you buy our insurance,” ask them to put that condition in writing.
If they refuse, the buyer can send an email after the conversation recording what was said and asking the dealer to confirm why the vehicle is not being delivered.
The idea is simple: don’t let an important dispute remain only a verbal conversation at the showroom.
Gupta says the same documentary trail can become crucial if the consumer later has to approach a regulator or consumer forum.
A buyer should preserve proof of payment towards the vehicle, including receipts, bank transfer records or loan disbursement documents, along with the booking form or agreement. The showroom’s insurance quotation and the alternative policy or quotation obtained from another insurer should also be kept.
“Written or recorded communication, including emails, messages, or call recordings where the dealer links delivery to purchase of their insurance, would also be crucial,” Gupta says.
The buyer should also preserve correspondence showing that insurance had already been arranged from another provider.
In practical terms, the evidence should establish three things: you paid for the vehicle, you had arranged insurance, and the reason given for withholding delivery was your choice of insurer.
WHAT IF THE DEALER REFUSES TO GIVE YOU ANYTHING IN WRITING?
A dealer may be reluctant to send an email saying that the car will not be delivered because the buyer chose another insurer. That does not mean the consumer has no way of documenting the incident.
Gupta says that if the dealer refuses to provide a written refusal, the buyer should send a formal email or letter recording the sequence of events and asking for delivery.
The email can state when the vehicle was booked, how much has been paid, when insurance was arranged, what policy was offered by the dealer and what the dealer told the buyer about delivery.
The customer can then ask the dealer to confirm its position.
This creates a contemporaneous record even if the dealer does not respond directly.
Gupta says such documentation can become important evidence if the matter eventually goes before a consumer commission or regulator.
The same applies to WhatsApp messages, SMS exchanges and other written communication. If the showroom has sent a message linking delivery to its insurance, do not delete it.
WHAT IF THE SHOWROOM SAYS OUTSIDE INSURANCE WON’T WORK?
This is another point at which a buyer can get stuck.
In the Reddit case, the buyer said the showroom warned him that choosing insurance from outside could affect cashless claims. For a customer who is unfamiliar with motor insurance, the possibility of facing trouble at the time of a future claim can be enough to make them give in and buy the more expensive policy.
But a buyer should not make that decision purely on a verbal assurance from the salesperson.
Ask the dealer to explain the condition and any alleged limitation in writing. At the same time, check the insurer’s network and the actual terms of the policy being offered.
Arora says a customer who finds a cheaper policy with similar or better coverage can choose it.
The comparison should, of course, be like-for-like. A lower premium does not necessarily mean a better policy if it has different coverage, deductibles, insured declared value or fewer add-ons.
But the choice of insurer itself, according to Arora, remains with the customer.
WHERE SHOULD A BUYER COMPLAIN?
If the dealer continues to refuse delivery or pressure the buyer after the customer has documented the issue, the next step is escalation.
Arora recommends first taking the matter to the manufacturer’s regional office. She says a buyer facing pressure to purchase insurance or unwanted add-ons can then register an unfair trade practice complaint.
Gupta similarly recommends starting with the dealer’s management or the vehicle manufacturer.
If the issue remains unresolved, he says the buyer can approach the National Consumer Helpline, IRDAI for the insurance-related aspect or the Consumer Commission.
The National Consumer Helpline can be reached on 1915 and provides a pre-litigation grievance redress mechanism. National Consumer Helpline
The important point is that the buyer should not simply assume that a showroom’s refusal means the only way to get the car is to accept its insurance.
The documentary trail matters here. As Gupta puts it, evidence showing that payment was made, delivery was due and the only reason for withholding the vehicle was the customer’s choice of insurer can help establish the consumer’s case.
– Ends
SOURCE :- TIMES OF INDIA
